At a Glance
- On February 1, 2025, President Trump announced tariffs of 25% against goods imported from Canada and Mexico and 10% against goods imported from China, after declaring a national emergency under the International Emergency Economic Powers Act (IEEPA).
- However, the tariffs against goods from Canada and Mexico have been paused for one month, with both Canada and Mexico agreeing to take, respectively, certain steps aimed at stemming the flow of fentanyl into the United States (which served as the primary basis for President Trump’s invocation of IEEPA).
- The 10% tariffs impacting Chinese imports went into effect on February 4, 2025, marking the first implementation of tariffs under IEEPA in U.S. history.
- China has announced countermeasures, which include increased tariffs on certain U.S. goods imported into China, an antitrust probe into Google and restrictions on Chinese exports of key minerals. Its measures will go into effect on February 10.
Deferral of Tariffs on Imports From Canada and Mexico
The previously announced tariffs against goods from Canada and Mexico have been paused for one month, with both Canada and Mexico agreeing to take, respectively, certain steps aimed at stemming the flow of fentanyl into the United States (which served as the primary basis for President Trump’s invocation of IEEPA).
Before the announced agreement between the U.S. and Canada, CBP released an unpublished Federal Register notice containing official guidance regarding the now deferred tariffs against imports from Canada. CBP has since released a message on its Cargo Systems Messaging Service (CSMS #63991510) stating that it “will not apply the additional duties” against Canada at this time.
Additional Tariffs on Imports From China Implemented
The 10% tariffs impacting Chinese imports went into effect on February 4, 2025, marking the first implementation of tariffs under IEEPA in U.S. history. The as-yet unpublished Federal Register notice implementing the tariffs on China is available here and clarifies the following:
- The 10% additional duties will be effective with respect to “articles that are the products of China” that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time on February 4, 2025.
- “Articles that are the products of China” will include products of Hong Kong in accordance with Executive Order 13936 on Hong Kong Normalization (See 85 Fed. Reg. 43413 (July 17, 2020)).
- We note that this conflicts with U.S. Customs and Border Protection (CBP) precedent, which has treated Hong Kong as a separate country of origin.
- The 10% duties will be imposed on all tariff classifications in addition to general rates of duty and existing retaliatory tariffs (i.e., Section 232, Section 301, and antidumping and countervailing duties).
- Donations of food, clothing and medicine intended to relieve human suffering will be exempt.
- Informational materials excluded by 50 U.S.C. § 1702(b)(2) and (3) and personal baggage will be exempt.
- CBP’s Federal Register notice creates new Chapter 99 provisions for the tariffs and exemptions.
- De minimis treatment is not available for these products, and all shipments from China will need to have formal entry.
- The duties do not apply to goods eligible for Chapter 98 duty preferences.
- Except that the duties shall apply to the cost of repairs or alterations for imports for which duty preferences are claimed under 9802.00.40, .50, and .60.
- For imports of articles for which duty preferences are claimed pursuant to 9802.00.80, the additional duties apply to the value of the article assembled abroad less the cost or value of such products of the United States.
- Goods admitted into a foreign-trade zone after 12:01 a.m. EST on February 4, 2025, must be entered under privileged foreign status, unless they are eligible for admission under “domestic status.”
- There is no drawback available against these duties.
- Goods that “were loaded onto a vessel at the port of loading, or in transit on the final mode of transport prior to entry into the United States, before 12:01 eastern standard time on February 1, 2025; and (2) are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on February 4, 2025, and before 12:01 a.m. eastern standard time on March 7, 2025” will not be subject to the duty, but only if the importer certifies it is eligible for this exemption to CBP using tariff classification 9903.01.23.
- The notice is silent as to the applicable rule of origin, which we understand means that the duties will be subject to the regular rules of origin — i.e., substantial transformation or the textile rules of origin.
China Responds With Countermeasures
China has announced countermeasures in response to this U.S. action, which include increased tariffs on certain U.S. goods imported into China, an antitrust probe into Google and restrictions on Chinese exports of key minerals. These measures will go into effect on February 10.
Specifically, China’s Customs Tariff Commission of the State Council announced:
- 15% duties on U.S. coal and liquefied natural gas
- 10% duties on crude oil, agricultural machinery, large-displacement vehicles and pickup trucks
Beyond the additional duties, China said that it would tighten export controls for five key minerals — tungsten, tellurium, bismuth, molybdenum and indium products.
Finally, China’s antitrust regulator said it was opening an antitrust probe into Google without providing further details of the probe.
